The crypto world has been clamoring for a Bitcoin ETF, but the US Securities and Exchange Commission (SEC) has been routinely dishing out the negative news. In response, XBT Provider – a Swedish firm – launched a Bitcoin ETN that tracks the value of Bitcoin. This incredibly popular investment product quickly rose to fame in Europe and even got a US Dollar denomination. However, the SEC quickly shut down that party and investors were once again left out in the cold.
This time around, XBT Provider has shut down its own party, citing market uncertainty. It had planned to launch an altcoin ETN that tracked a basket of top altcoins, but XBT Provider believes there would be little interest at the moment, especially given the current crypto winter.
Bitcoin Cash Scaring off XBT Provider
While negative market sentiment played its role in the withdrawal of plans for the altcoin ETN, another larger factor was at play – crypto community fallouts. That’s right, the Bitcoin Cash hash war has scared off XBT Provider until the team fully understands hard forks and community politics. In the Bitcoin Cash hash war of 2018, two factions in the community fell out, causing a hard fork to occur and a hash war to break out. While ABC was declared the clear winner, this activity and behavior has given XBT Provider food for thought.
Wrong Side of the Hard Fork
The ETN was slated to track the value of five to ten altcoins, with the list rarely changing. However, if one of these projects decides to hard fork and the version XBT Provider’s ETN was holding becomes the unfavorable party, it could negatively impact the ETN’s value and put investors funds at risk. This is the main reason the ETN has been delayed until further notice. In a statement, Laurent Kssis – CEO XBT Provider – said,
It’s essential to know how the crypto community is responding to the split and who’s going to support one asset versus the other. If we don’t make the right decision, these assets will drop and if they’re part of the basket we can’t go back because it’s in the final term sheet.
The crypto community is used to bad news, but the traditional investment world is still acclimatizing. While this bump in the road for the altcoin ETN will only drive positive sentiment for the product later down the line, for the time being it could cause a smattering of negative market sentiment. There is no release date for the updated version of the ETN, but we aren’t expecting to see it make an appearance any time this year.
